Don't buy a car sold "as is"
Check the history of the car on
www.carfax.com
Use EVERYTHING the car has, except maybe the jack =)
If you don't know of a mechanic you can take it to to have it looked over, here's a short list of things to check...
1.) Transmission fluid, especially if it's an automatic, smell it after you drive it... if it smells like toast, don't buy it
2.) Engine oil, also smell it after you drive it, and feel it... wipe the oil off the dipstick with your fingers... you shouldn't feel ANYTHING gritty
3.) Air filter, check for oil in the filter after you've driven it
4.) Check the coolant BEFORE you drive it... should be a bright green color, or bright red, depending what type it is... but it should never look dirty or dingy
5.) After you drive it, look around in the engine bay for oil drips, coolant leaks, etc.
6.) Check the brake fluid... if the level is low, it probably needs a brake job
Things to do when test driving...
1.) For an auto tranny, pay attention to how it shifts... if it's a VERY soft shift, and not a luxury car, it the clutches in the tranny might be worn and in need of replacement
2.) Accelerate like a bat out of hell... good place to do it is the on ramp of an expressway so you can get through at least the first 3 gears before you have to lift to avoid breaking the law... when you lift, lift off completely and suddenly, look in the rear view mirror for smoke... blue smoke = internal oil leak... black smoke = improper air/fuel mixing... white smoke = coolant leak
3.) Practice panic stops... you want to be sure the brakes can handle it if you ever HAVE to do this... if the car is ABS equipped and the tires lock up every time you try a panic stop, ABS isn't working properly (this will also familiarize you with the "feel" of the ABS system, in some cars, the pedal vibrates as the ABS solenoids pulse the brakes, and some people get scared and let off on the brakes, which is bad)
4.) Corner while braking heavily, corner while accelerating heavily... in both directions... listen for clunks, or grinding etc... clunks are probably suspension related, worn parts... grinding while turning is probably bad wheel bearings
*EDIT* If you suspect the salesman is lying about something... a very good way to spot collision damage is to look for overspray in the engine compartments, door jams, trunk, and wheel wells... this will tell you that portion of the car has been repainted... also... thumping on the body panels with your knuckle is a good way to find body filler, you'll hear a difference in the sound... you can also check that with a magnet.